How do Mortgage Credit Checks Work?


When you make an application for a mortgage, lenders will carry out credit checks to ensure that you can afford the repayments. 

Many people are wary of credit checks as they’re not fully aware of what’s involved, but at Barlow Irvin, we can walk you through the credit check process to ease your mind. 

What is a mortgage credit check?

A mortgage credit check is a check by lenders in which they will look at your financial history to determine how responsible you have been in the past when borrowing money. From this, they can establish how risky it would be to offer you a mortgage. 

If a provider finds too many red flags on your credit history, they may reject your application. However, different providers have different ways of evaluating a credit report so if your credit score is poor, it won’t automatically stop you from being accepted. 

What stage of a mortgage application is a credit check?

Lenders will usually run a credit check early on in the application process, usually when a mortgage in principle is made.

Lenders can either conduct a soft or hard credit check at this point, as well as:

  • Prior to exchanging 
  • Exchange day
  • After exchanging 
  • Close to completion day 

How do mortgage lenders check your credit score?

Lenders will use their own credit score checking methods to review your credit score, but in general, they will look at your credit history and debts, your expenditures, your age and how many dependents you have.

Mortgage lenders are really looking to determine that you can afford the house and that your position hasn’t changed since you first applied. 

Not every past credit issue you’ve had will affect your ability to secure a mortgage, and it entirely depends on how your potential provider assesses your financial past and the subsequent risk of this. 

Lenders will want to check:

  • Missed loan repayments
  • Credit or loan rejections 
  • Any utility or phone contract issues
  • IVAs
  • Bankruptcy 

How far back do they check your credit for a mortgage?

The length of time a lender will look at your credit history also varies, but they will typically focus on the past six years. 

Generally speaking however, lenders are less likely to rely on older data and will focus more on how you’ve managed your money over the past few years. 

What do lenders see when they do a credit check?

The following data is what will appear on your credit report:

  • Address details from the electoral register. This includes your current and past addresses.
  • Financial credit agreements such as loans, credit cards, mortgages and overdrafts.
  • Public records such as insolvencies, bankruptcies and County Court Judgements (CCJ).
  • Financial associates, such as someone you’ve taken a mortgage out with.

Credit checks do not include your employment history, savings accounts, criminal records, medical records, ethnicity, religion or political views.

Will a credit check impact mortgage eligibility?

While having a credit check may affect your eligibility to get a mortgage, remember that lenders will also be looking at how much you earn and how much you spend to determine your affordability. 

If you have a poor credit score, do not worry, it does not mean you are completely ruled out from getting a mortgage, since lenders take into account a lot of other factors too. 

If you can prove to lenders that you can afford your monthly mortgage payments, even if interest rates or your life situation changes, it may help you get a mortgage even if your credit score isn’t the highest. 

If you would like to speak about your credit score before potential lenders see it, you can speak to our professional and friendly team at Barlow Irvin who will talk you through your credit score and the implications it can have on your mortgage application. 

Contact us today to find out more about credit checks. 

About the author 

Gary Oxborough

Gary is the Founder and Director of Barlow Irvin Financial Services Ltd. He has been in the Finance industry for over 20 years and has specialised in Mortgages since 2003. As well as running the firm, he is still actively involved in advising clients.

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